France to ‘fight’ for Amazon inclusion in digital tax

Despite Amazon's colossal footprint and a market capitalisation of more than $1 trillion, its profit margin last year amounted t
Despite Amazon’s colossal footprint and a market capitalisation of more than $1 trillion, its profit margin last year amounted to just 6.3 percent, placing it firmly below the 10-percent threshold.

France said Wednesday it would make sure that internet commerce giant Amazon is subject to a minimum global tax endorsed by the Group of Seven wealthy nations.

According to the plan, countries would be allowed to tax a share of the profits of the most profitable companies in the world at a rate of at least 15 percent, regardless of where they are based.

This would apply, however, only to companies whose profit margins exceed 10 percent.

Despite Amazon’s colossal footprint and a market capitalisation of more than $1 trillion, its profit margin last year amounted to just 6.3 percent, placing it firmly below that threshold.

But French Finance Minister Bruno Le Maire told the broadcaster RMC that the potential loophole would not stand.

The tax reform “must apply to Amazon,” he said. “France will fight to make sure that it does.”

He said the tax reform had been negotiated at the Organisation for Economic Co-operation and Development with the specific aim of making all digital giants pay their fair share.

“The problem with Amazon is that some of its businesses don’t generate a profit margin of more than 10 percent,” Le Maire said, singling out its deliveries branch.

At Amazon’s cloud-based services, meanwhile, margins are “very large,” he said.

The answer was to treat Amazon’s businesses separately for tax purposes “so that all the very profitable parts are certain to be subject to this digital taxation”.

Le Maire acknowledged there were several obstacles still to overcome before the world could apply the digital tax regime.

One was that China’s agreement was needed. “Believe me, that’s going to be a very different ballgame,” Le Maire said.

Another is the hope of some European countries to go beyond the 15 percent tax rate, which Le Maire said constituted only a “minimum rate.”

The final challenge is to make sure that “all digital giants are subject to this tax without exception.”


Amazon may prove exception to global tax rules


© 2021 AFP

Citation:
France to ‘fight’ for Amazon inclusion in digital tax (2021, June 9)
retrieved 9 June 2021
from https://techxplore.com/news/2021-06-france-amazon-inclusion-digital-tax.html

This document is subject to copyright. Apart from any fair dealing for the purpose of private study or research, no
part may be reproduced without the written permission. The content is provided for information purposes only.

Stay connected with us on social media platform for instant update click here to join our  Twitter, & Facebook

We are now on Telegram. Click here to join our channel (@TechiUpdate) and stay updated with the latest Technology headlines.

For all the latest Technology News Click Here 

 For the latest news and updates, follow us on Google News

Read original article here

Denial of responsibility! TechiLive.in is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – admin@techilive.in. The content will be deleted within 24 hours.
Exit mobile version